Industry Updates

State of the Market 2020: The Results

4 minutes

Qamar Anwar, managing director, December 08, 2020

Now in its sixth year, our annual State of the Market survey is designed to gauge the challenges facing the personal injury and clinical negligence sector to build a comprehensive picture of the market, and this year has certainly provided challenges like no other.

Another direct impact of the pandemic was more delay in implementing the whiplash reforms. This has been another year of standing still, which is creating significant challenges for businesses that are trying to prepare for May – and the government has made clear its intention that it really will implement the Civil Liability Act reforms this time.

What our survey this year showed us is that most personal injury law firms are yet to decide on post-whiplash reform strategy. Is this because of the uncertainty around the reforms or a wider strategic inertia that besets some firms?

Just 18% of claimant personal injury solicitors say their firm has settled on a strategy to deal with next April’s whiplash reforms.

Of the 1,241 responses to a Twitter poll, 37% said their firms have not decided on their strategy, while 28% admitted that they have not even thought about it yet. One in six (17%) said they were “getting there”.

Nonetheless, some 41% of solicitors predicted that the reforms would have a major impact on their firms – indeed, it would be ‘business critical’ for 15%. A quarter said they would have ‘minimal’ impact, while for 35% they would make no difference at all.

A more in-depth survey of 65 firms found that nearly half expected small claims to be the preserve of a relatively small number of large firms with the ability to process claims in volume and in a largely automated manner. They also predicted that the courts would become clogged with litigants in person who have not settled their claims inside the new portal.

Most firms that are not planning to handle RTA claims said they would simply reject any that come their way, although some said they would pass the clients on to another firm.

It is worth noting that one side-effect of Covid-19 has been that a significant proportion of firms said they had worked out how to handle claims more efficiently, with a quarter saying they felt better placed to cope with the reforms as a result.

A range of behaviours are expected to emerge under the new regime, with respondents in both surveys fairly evenly divided between where the focus will be. There will be an emphasis on the non-injury elements of claims, like credit hire, as well as claims for non-whiplash injuries suffered at the same time.

The Ministry of Justice revealed recently that it would support a test case so that the courts can determine how minor non-whiplash injuries should be handled alongside injuries that are covered by the new system. This is sure to cause yet more delay and uncertainty.

Solicitors anticipated too that claimants might argue for longer periods of recovery from whiplash injuries (compensation will be awarded depending on the length of time symptoms last), while also fighting on to seek an uplift on the damages from the small claims court – although the amount by which judges will be able to increase awards is yet another detail the government has yet to confirm.

Qamar’s view

The Ministry of Justice has taken delay and dithering to a new level. With less than four months until the Civil Liability Act reforms are meant to come into force, it is unacceptable that we are still waiting for the details of how they will work. The government has had years to sort this out but cannot even tell us when the new rules will be published. And yet they expect everyone to be ready to go just a few weeks later.

It is no wonder that uncertainty pervades the market – 40% of our second survey respondents don’t believe the reforms will even happen in April – and that many firms have not decided exactly what they are going to do in response to the reforms.

But the important thing to remember is that innocent people are still going to be injured by the negligence of others and it is up to all of us on the claimant side to ensure they have a route to justice if they do not want to take on insurance companies themselves through the new portal.

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